February 17, 2017
A new housing affordability model, created by the National Association of Realtors and realtor.com, is suggesting that homebuyers at a variety of income levels could experience “an inadequate amount of listings on the market within their price range in the coming months,” according to a report.
The report, dubbed the Realtors Affordability Distribution Curve and Score, is new monthly research geared toward looking at affordability conditions at different income percentiles and levels. In January, The Affordability Distribution Curve was below the equality line, with the gap generally wider at lower incomes. This suggests tighter supply conditions.
Breaking this down, it means that a household in the 35th income percentile could afford 28% of all listings, while a median income household at the 50th percentile could afford 46% of listings. Lack of supply, combined with higher mortgage rates and price growth, are, in part, creating the affordability issues.
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